Safe Harbor Plan Design

[wsp]

Is anyone running a Safe Harbor plan with a fixed and discretionary matching contribution. I'm curious as to the participation rate and the level of participation that a plan like this really has. Also, why use these formulas over other alternatives?

I've got it in mind for a client that doesn't fit into the new comp models and am trying to ferret out possible issues; good and bad. (besides no adp/acp and top heavy).

[Guest HiKidsImASrPensionAdmin]

We are running one plan like that. The participation rate did not change from before the plan was re-designed. It is a small trucking company that only employs about 15 people, plus the 6 owners.

It was designed using the fixed match, SH match, plus a discretionary match, in addition to an int p/s essentially because the broker attended a seminar where the discussed it and he thought it would make him sound unique. This is allowing the owners to give themselves more (since they are deferring the max) while minimizing the NHCE's. It is a gamble though, if the NHCE's can suddenly defer more, it is going to cost the employer alot!

[wsp]

We are running one plan like that. The participation rate did not change from before the plan was re-designed. It is a small trucking company that only employs about 15 people, plus the 6 owners.

It was designed using the fixed match, SH match, plus a discretionary match, in addition to an int p/s essentially because the broker attended a seminar where the discussed it and he thought it would make him sound unique. This is allowing the owners to give themselves more (since they are deferring the max) while minimizing the NHCE's. It is a gamble though, if the NHCE's can suddenly defer more, it is going to cost the employer alot!

Thanks,

That's what I'm looking at doing as well...though I'm likely going to avoid the p/s feature. Only 2 hce's make more than 90k. So while they would get more $$, the percentage going to ownership group doesn't justify the expense. Especially since it brings Top Heavy into play.